Once again, it appears that the Congressional Budget Office (CBO) has rained on the White House’s propaganda parade.
The nonpartisan government agency reported yesterday that the federal government’s budget deficits and the public’s share of the debt as percentage of GDP are projected to grow to levels not seen since the World War II era.
Excessive deficits and public share of the debt are harmful because they slow investment in the economy, harm the nation’s credit and borrowing ability, and create great uncertainty both for the private sector and public services. As the world is seeing in countries like Greece, if the problem is not corrected, future generations will be left to cope with high unemployment, rampant inflation, and instability that harms every member of society – but hits the least fortunate hardest.
The announcement comes just as the White House was celebrating its projection that the deficit would fall below $600 billion for the first time under President Obama. But the CBO has shed light on the fact that Obama has simply kicked the can down the road with year after year of trillion-dollar deficits, expansion of the entitlement state, a complete unwillingness to reform mandatory spending.
The White House constantly celebrates that they have cut budget deficits every year since 2009, but they fail to acknowledge the record deficits President Obama has overseen throughout his administration.
The budget deficit every single year under President Obama has been larger than any other year that preceded his presidency. Obama’s $1.5 trillion deficit in 2009 was well over double the worst budget year in history before his administration – and was subsequently followed by three more years of deficits in excess of a trillion dollars.
The CBO projected deficits will climb steadily until 2039, at which point the federal debt held by the public as a percentage of GDP will reach 106 percent – a level not seen since the aftermath of World War II.
The CBO attributes the rising deficits to increases in mandatory spending on entitlement programs – specifically Social Security, Medicare, Medicaid, and Obamacare. Economists and politicians on both sides of the philosophical divide acknowledge that these programs are the primary drivers of the national debt, which is quickly approaching a breathtaking threshold of $18 trillion. Total mandatory spending is well over $2.5 trillion a year, representing two-thirds of all federal spending. The major entitlement programs now constitute about 45 percent of all federal spending, and the share continues to grow.
These programs were already financially unsustainable before Barack Obama took office, but the addition of Obamacare, its expansion of Medicaid, and the unwillingness to reform Medicare and Social Security have made them even worse. The government obviously has other responsibilities, but health care entitlement funding is quickly crowding them out.
President Obama can celebrate all he wants, but Americans are realizing the hard truth – he has continued to kick the can down the road by imposing new financial obligations, and the burden on future generations is rapidly beginning to look insurmountable.
Worse, as the costs and burdens created by government have expanded, the capacity of Americans underwriting this expansion has diminished. While government spending has skyrocketed under President Obama, the proportion of Americans working has dwindled to its lowest point since the 1970s. Whether it is budget deficits or labor force participation, President Obama’s policies are pulling the economy in the wrong direction.
The CBO report should be a rallying cry for taxpayers to hold legislators and the president accountable and to call on leaders to prevent America from suffering the same fate as Greece.
Akash Chougule is policy analyst at Americans for Prosperity.